SEBI revises demat rules for stock trading

Companies should have at least 50 per cent of their non-promoter holding in the form of dematerialised securities by 31 October 2010 to be eligible to be traded in the normal segment of the stock exchanges.

Trading in the scrips of those companies where the shareholding pattern do not satisfy the above criteria will take place in trade for trade segment (TFT segment) thereafter, the Securities and Exchange Board of India (SEBI) said in a circular to stock exchanges today.

Companies have to specify their shareholding pattern in the quarterly results and the cut-off will be based on the latest available quarterly shareholding pattern, SEBI said in its release. 

In addition, for companies in the process of merger, demerger, amalgamation, capital reduction or consolidation, corporate debt reduction package sanctioned by the CDR cell of the Reserve Bank of India and any scheme of arrangement under the Companies Act or sanctioned by the courts, all trading (except for the original scrips, on which derivative products are available or included in indices on which derivative products are available) should take place in TFT segment for the first 10 trading days, with applicable price band, while keeping the price band open on the first day of trading, SEBI said.

This would also apply to securities that are being admitted to trading from another exchange by way of direct listing/MOU/securities admitted for trading under permitted category, where suspension of trading is being revoked after more than one year.

Further in all cases, SEBI said, the stock exchanges should ensure before starting trading in scrips that the companies have complied with the disclosure requirements and the same is publicly disseminated on the website of exchanges to enable investors to take informed decision.